Evaluating a company is a very complex and demanding process. Given that companies are
different in terms of organization, structure and business, it is not enough to use only one of
the valuation methods. Therefore, the appraiser is required having extensive theoretical
knowledge and experience in practical application.
There are different business valuation methods. This paper deals with the presentation of
cash-flow based valuation methods as well as asset-based valuation methods. Value-based
management and value-added concepts are the issues that this paper is focused on.
The use of valuation methods based on residual income or the expected future effects of a
company, is much more complicated than using methods based on historical financial
reporting data. The reason for this is that they implement the future business of the
company in the process of valuation and are subject to major changes in the case of market
instability and unexpected economic effects. It is not enough to implement valuation
methods only once, but frequent application is needed to gain insight into business
operations and enable timely reactions to economic changes from the company's
surrounding.
Controlling, or controller, has the task of selecting the most appropriate valuation method
for a particular company in order to get the most accurate or realistic enterprise value data.
By establishing an information network, business organization, and reporting transparency,
controlling enables business stability and maximizes financial result.